Prohibition on the Importation of Goods Produced with Forced Labor

Through the Agreement, its Sole Annex (the "Annex") and the Guidelines, Mexico complies with Article 23.6 of the Labor Chapter of the Agreement between Mexico, the United States and Canada ("USMCA"), consisting of prohibiting the importation of goods produced through forced or compulsory labor, including child labor. In this regard, we highlight the following: • The Government of Mexico may prohibit the entry into Mexican territory of goods produced with forced labor. • Goods to be imported into Mexico, under any customs regime, will be understood to have been produced without using labor of workers in a situation of forced or compulsory labor, including child labor, provided that there is no resolution in force issued by the STPS with respect to them under the terms of the Annex itself. • The STPS, in coordination with the SE and through the exchange of information with Mexican and foreign authorities, may, on its own initiative or at the request of any individual or legal entity legally incorporated in Mexico, initiate the procedure to investigate the use of labor of workers in a situation of forced or compulsory labor. • The STPS will have a term of 180 business days to investigate the identified goods and issue a determination in this regard. Said term may be extended on a single occasion and for an equal period. • In the event that the STPS determines the existence of forced or child labor in the production of goods, this determination will be published on its website so that importers are aware of the tariff classifications for which importation will be prohibited. • Likewise, the STPS will inform the national customs authorities so that they implement said prohibition. • The affected individual or legal entity may request the review of the determination issued by the STPS in order to render it without effect, and must submit the information and documentation proving that the use of forced labor in the production of the goods has ceased. The review process must be requested through the Mexican Single Window for Foreign Trade. All of these measures are consistent with international law, specifically, Convention 29 on Forced Labor of the International Labor Organization ("ILO"), the 2014 Protocol to Convention 29, ILO Convention 182 on the Worst Forms of Child Labor, Chapter 23 on labor matters of the USMCA, and the United Nations Protocol to Prevent, Suppress and Punish Trafficking in Persons, Especially Women and Children (known as the Palermo Protocol). Likewise, they reflect the advancement of the ESG (environmental, social and corporate governance) agenda within our country's legal framework. In light of the foregoing, we consider it of the utmost importance to preventively verify and corroborate, with the suppliers of goods to be imported into Mexico, compliance with each and every one of the provisions of the Agreement, as well as their compliance in labor matters with respect to their workers and, where applicable, to design or implement strategies to avoid risks and identify areas of opportunity in these areas. The Labor and Foreign Trade teams are at your service to resolve any questions in this regard. In the following links you will find the reference publications: Agreement, click here. Guidelines, click here. For additional information, please contact: Luis Miguel Jiménez, Partner: +52 (55) 5258-1058 | lmjimenez@vwys.com.mx Rodolfo Trampe, Partner: +52 (55) 5258-1054 | rtrampe@vwys.com.mx Rafael Vallejo, Partner: +52 (55) 5258-1036 | rvallejo@vwys.com.mx Lourdes Salazar y Vera, Counsel: +52 (55) 5258-1058 | mlsalazar@vwys.com.mx Alejandra Arizpe, Associate: +52 (55) 5258-1014 | aarizpe@vwys.com.mx Fernando Mancilla, Associate: +52 (55) 5258-1054 | fmancilla@vwys.com.mx